Russian oligarch offers £43m for Waterstones

Is one of Roman Abramovich's close pals about to get his hands on the chain? A deal would at least give HMV some breathing room...

by Michael Northcott
Last Updated: 06 Nov 2012
HMV could get the chance to stave off impending damage from its large debt pile if it accepts a £43m buyout proposition for its books arm, Waterstone’s. Long in the frame for an opportunity to buy the chain, Russian oligarch and little-known friend of Roman Abramovich, Alexander Mamut, has offered the ailing music chain a cash deal.

The freely printed word doesn’t seem an obvious product for a man who was once influential in Boris Yeltsin’s Kremlin, and remains friends with a couple of other billionaires. But Mamut, who was once linked with a bid to buy Blackburn Rovers, has clearly had his eyes on British business for a while, and will want to secure his standing amongst his peers, most notably Aleksandr Lebedev and Abramovich, who own the London Evening Standard and Chelsea FC respectively, among other interests.  

Mamut is already a 6% shareholder of HMV, but given its recent profit warnings and obvious self-doubt, the oligarch will be keen to find a way of shoring up his interests in the business. One can only wonder if (when Mamut takes over) Waterstones’ stock of Russian phrase books will begin to rise...

Of course, it’s not certain his bid will be accepted, but goodness knows HMV could do with the £43m: its debt pile is already topping £130m, and its profit projections have dropped from £45m to £30m since the beginning of 2011. The group’s market value is approximately £42m, and given its deteriorating profitability and ballooned debts, the company’s eight lenders have allowed a two-month dispensation for the company to come up with a new strategy, a likely component of which will be to raise money before the administrators come a-calling.

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